Mortgage Applications Down But Still at High Level

Washington, DC, Dec. 10, 2008--Mortgage applications decreased a seasonally adjusted 7.1% for the week ended Dec. 5 compared with the final week of November, according to the MBA's weekly survey.

Refinancing applications eased just 0.9% last week, basically maintaining the high volume seen the week before. Refinance applications had skyrocketed more than 200% during the week ended Nov. 28 as opposed to the third week of November, as rates on fixed-rate mortgages plunged.

The surge in refinancings began days after after the Federal Reserve announced it would purchase up to $100 billion in direct debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, along with up to $500 billion of mortgage-backed securities backed by Fannie, Freddie and Ginnie Mae.

Also for the first week of December, the applications for mortgages to make home purchases fell a seasonally adjusted 17.4% compared with the previous week.
 
Compared with the same week in 2007, applications were up 2.2% last week on an unadjusted basis, the MBA said. The four-week moving average for all mortgages as tracked by the MBA was up a seasonally adjusted 17.8%.
 
Applications to refinance existing mortgages made up 73.7% of all filings last week, up from 69.1% the previous week.

Rates on 30-year fixed-rate mortgages averaged 5.45% last week, down from 5.47% the previous week, while the average on 15-year fixed-rate mortgage slipped to 5.09% from 5.13%. But one-year ARMs averaged 6.76%, up from 6.61%